South Africa’s Biggest Fund Votes Against Mining Executives’ Pay

By Kevin Crowley and Andre Janse van Vuuren -
Aug 19, 2013

Public Investment Corp., the biggest
South African investor, voted against the executive pay of the
nation’s biggest gold and platinum mining companies because it
failed to track performance and was high relative to peers.

South African mining companies have been resisting demands
from labor unions for above-inflation wage gains for underground
workers, saying they are unaffordable. PIC said Gold Fields’
proposal to hold the pay of Mamphela Ramphele, chairman at the
time, at 2.4 million rand ($235,000) meant it was “too high”
at almost double the median figure of resource peers.

“The remuneration policy appears to be inconsistent with
best practice,” said PIC, the biggest owner with 7.3 percent.
“There are no clear defined group performance targets.”

Gold Fields, which spun off most of its domestic assets to
create Sibanye this year, in 2012 paid Chief Executive Officer
Nick Holland 45.3 million rand, up 38 percent, including 24.3
million rand of share payouts originally awarded in 2009.

Unions are demanding pay for entry-level underground gold
workers of as much as 12,500 rand a month, from 5,000 rand now.

The Chamber of Mines, representing gold companies, has
offered an inflation-matching increase of 5.5 percent to 5,275
rand a month excluding allowances and bonuses.

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PIC said Anglo American Platinum, the biggest producer of
the metal, had “no clearly defined performance targets and
sustainability measures.” It’s the biggest shareholder after
Anglo American Plc, according to data compiled by Bloomberg.

Anglo American Platinum and Gold Fields didn’t immediately
respond to requests for comment by phone and e-mail.

“We’re a new company having been spun out of Gold Fields
so our remuneration of non-executive directors is similar to
that of Gold Fields,” James Wellsted, a spokesman for Sibanye,
said today by phone. The company has “employed an external
agency to help” realign pay, Wellsted said.

Gold Fields’ Ramphele, who quit in February, was paid 2.3
million rand in 2012, according to the company’s annual report.